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Paul C

Car manufacturing - a timely adjustment?

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https://www.bbc.co.uk/news/business-58335060

The headline is, that new car production is down 37.6%. Perhaps now is the time for the market correction that has been building up for ages, the fact is there is (was) overproduction of cars basically flooding the market, getting people into them with big discounts and (IMHO) stupidly high amounts of finance/borrowing. With the way the world and the environment is going, less wastage and consumerism is a long term good thing. Of course it would be a big shake up for UK with so much car manufacturing based here but then there's worker shortages in many other UK industry sectors.

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Posted (edited)
9 hours ago, Paul C said:

https://www.bbc.co.uk/news/business-58335060

The headline is, that new car production is down 37.6%. Perhaps now is the time for the market correction that has been building up for ages, the fact is there is (was) overproduction of cars basically flooding the market, getting people into them with big discounts and (IMHO) stupidly high amounts of finance/borrowing. With the way the world and the environment is going, less wastage and consumerism is a long term good thing. Of course it would be a big shake up for UK with so much car manufacturing based here but then there's worker shortages in many other UK industry sectors.

I think by mid 2022 we will be back to normal, as manufactures need to spread their R&D costs across the entire production run and of course you have the costs of factories, staff etc etc. You then have reduced parts sales, which will badly affect profits. I think we will see increased prices, but don't think the days of pre reg, subsidized finance deals are over. 

Edited by petrol head

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23 minutes ago, petrol head said:

by mid 2222 we will be back to normal

I don’t think I’ll be around to see it :lol: (sorry, I couldn’t resist it).

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2 minutes ago, BHM said:

I don’t think I’ll be around to see it :lol: (sorry, I couldn’t resist it).

:D they say men can't multi task!

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Interesting perspective - definitely seems like a good opportunity for the market to increase overall prices and decrease supply going forward

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Sometimes stuck on this crowded little island its hard to get a perspective.  Just prior to Covid the UK annual vehicle production was around 1.3 million in a global market of almost 100 million. China makes three times as many cars as the US - 21 million and growing. India is ramping up and developing countries like Indonesia are expanding capacity.  UK is a fringe player, a 'little peanut' as the Chinese say.

There is still massive global overcapacity - and as Covid retreats and chip supplies come back on stream they'll be back flooding the market.

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